In separate notes on Thursday, Wells Fargo analysts revealed their preference in the rideshare space, initiating an Overweight rating on Uber (NYSE:UBER) and an Equal Weight rating on Lyft (NASDAQ:LYFT).
The analysts assigned a $50 per share price target on Uber, stating the firm sees 2024 EBITDA closer to $6 billion than $5B.
"We believe Int'l competitors retrench further driven by regulatory issues (Didi) or morose private company funding environment. At the same time, high-margin ads business is scaling. As a result expect $5.8B '24 EBITDA, 9% ahead of Street," wrote the analysts.
Meanwhile, the analysts assigned Lyft with a $9 per share price target, stating they don't see terminal value risk, but they see "one more cut" coming to Q4.
"Multiple of 4.5x Street '25E EBITDA implies terminal value risk—we aren't that bearish as 1Q:23 UBER price increase a sign of future share stability, but aggressive '23 Street estimates (WFS 25% below Street '24 EBITDA) leave us on the sidelines," they explained.